In the next few decades the E&P Industry will face a unique confluence of two major challenges: it must continue to provide the world with sufficient oil and gas to support global development, while at the same time help it reduce the environmental impact of fossil fuel use, with a focus on the reduction of green-house gas CO2 emissions. This calls for innovative technical solutions and new approaches to the design and management of increasingly interdependent energy- and CO2 value chains.

The "intelligent?? capabilities that the industry has developed over the past decade can be leveraged to meet these twin challenges. The combination of CO2 EOR with Carbon Capture and Sequestration (CCS) in particular, offers attractive opportunities to combine enhanced oil- and gas recovery with GHG reduction, in a profitable way. This can be done at the level of individual field developments but also at the level of integrated energy/CO2 systems. The technical and economic implications of an "eco-efficient?? approach to the design of CO2 EOR projects are discussed, taking a North-Sea EOR feasibility study and CO2 supply project example. These types of projects greatly benefit from "oilfield intelligence?? to improve ultimate recovery and optimize CO2 capture, use and storage.

It is concluded that eco-efficient and intelligent technical and commercial design will have to become a core capability of the E&P Industry.

Introduction

How much can the Industry contribute to GHG reduction?

It is estimated that global CO2 emissions will have to come down to 10-11 Gt/yr by 2050,to limit the increase of average global temperatures to 2 deg C1. This represents a reduction of 70-80% from 2009 emission levels of some 26 Gt/yr.

The concept of "reduction wedges?? 2 representing 1 Gt/yr of carbon helps put into perspective what it would require from the E&P industry, to deliver a single wedge of CO2 reduction -equivalent to 3.7 Gt/yr- out of a total of seven.

Geological CO2 storage could go a long way to achieving this target but the required investments in infrastructure within E&P, power generation, steel and other industries would be huge. To illustrate the point: if the Groningen gas field in the Netherlands -the largest in Western Europe- would be fully utilized for CO2 sequestration, it could provide only about 1 to 2 years of storage for a single GHG reduction wedge of 3.7 Gt/yr 3. Worldwide there are only 20 gas fields in the Groningen size class. So this is a daunting task but, as has been shown by Bryant4, it is not beyond the Oil and Gas industry's capacity or capability.

The required investments in CCS would be additional to the $100-150 bln/yr the E&P industry spends to maintain oil and gas production at current levels of some 83 mln bopd and 295 Bcf/d of gas. Another $300-400 bln/yr would be required to increase global production to meet a projected 1.2-1.4% annual increase in demand up to 2050.

It is still unclear how developments in the global economy, energy and ecology will play out in concert, but some overall long-term trends can be distinguished:

Oil and gas will continue to provide more than half of energy supplies until well beyond 2050, but oil production may peak at around 105 mln bopd5,6

The energy mix will shift towards gas as a cleaner fuel for power generation -relative to oil and coal- but coal use will still rise significantly in absolute terms

Renewables, starting from a low base, will grow at up to 5 times the rate of fossil fuels, but are not expected to make up more than 10% of energy supply by 2030

Under any scenario, energy efficiency gains in all human activities will have to provide the bulk of the reduction of CO2 emissions going forward

Whether the E&P industry can meet these challenges depends on the global regulatory frameworks, emission trading systems and taxation schemes that may result from the Copenhagen COP15 Conference agreements.

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